Sunday, May 12, 2013

Australia\'s embassy in Budapest will close as part of budget cuts to foreign affairs and a rejig of aid spending.

As the federal government prepares to deliver a multi-billion dollar deficit in Tuesday\'s budget, Foreign Minister Bob Carr says his department will share in the cutbacks.

\'The most significant one is closing one embassy, that\'s the embassy in Budapest,\' he told ABC radio on Monday.

Plans to open a diplomatic post in the Senegal capital Dakar also have been put on the backburner, according to Fairfax newspapers.

Australia will cap foreign aid spending - primarily funds to manage onshore asylum seekers - and delay plans to boost spending to 0.5 per cent of gross national income by 2014/15.

Senator Carr admits delaying the increase by another year is disappointing.

\'It simply reflects the reality that you can\'t borrow money to spend on aid,\' he said, adding that spending had to be sustainable.

\'It simply means that we\'re not increasing aid according to the trajectory we had hoped to.\'

It is the second successive year in which the government has delayed its aid spending goal. However, it will go ahead and increase overall aid by 9.6 per cent.

\'The amount of money that is going to look after asylum seekers on Australia\'s shore is going to be capped where it\'s been for the past 12 months,\' Senator Carr said.

World Vision Australia chief executive Tim Costello acknowledges aid spending is still increasing but is disappointed the government is again deferring its commitment to lift it to 0.5 per cent of GDP.

No dollar was better spent than foreign aid and Australian aid had saved 200,000 lives in the past year, he said.

That could be another million lives saved over the next four years if the government had stuck to its commitment.

Mr Costello welcomed the cap on foreign aid spending being diverted to onshore refugees.\'Australians are smart enough to know that overseas aid is for overseas,\' he s\'To make ourselves the third largest recipient of our own aid ... doesn\'t make sense.\'